Did you know?
90% of homebuyers like yourself start their home search online and usually don't start working with a Realtor until after doing some window shopping on their own.
Why do people work with a Realtor®?
These days, I say Realtors do less and less of the shopping and more of the negotiating and protecting of their client's interests, equity, and monies, and dare I say it... sanity.
What is it like working with me as your Realtor?
- Well, I usually like to meet in person before touring homes together. I work mostly through referrals from past clients and with those that meet me at or through my open houses or with homeowners that receive my direct mailers or call me from my newspaper advertisements.
- Before we meet, I will also ask you about where you are at in your buying journey.
For example:
1. Have you been in touch with a lender? Or do you want or need lender recommendations?
2. Do you have timeline needs?
I'll want to know this soon rather than later.
3. What is your current living situation?
- Do you need to sell your home before you buy and need assistance in understand what options you have to getting from one house to the next?
- Are you a renter/tenant with a known move-out date?
- Are you a first time home buyer?
Without getting into too much detail, I will want to get a brief understanding of your motivation and situation.
Why meet in person before we tour homes?
- For one, I like to meet in person for my safety.
- But for two, I find it important to get to know my clients a bit more so that I can better understand their needs, timelines and deadlines, and discuss with them what to expect throughout the buying process.
I keep hearing about buyers having to pay for their Realtor® representation, what is going on?
As of August 2024, new regulations require Realtors® to sign a touring agreement with their buyers before "touring" or showing a home to a buyer. These forms discuss compensation and term length, both of which are negotiable - which can be scary for buyers.
Since the changes have come into effect, in my experience, there has not been an instance where a seller has not agreed to pay for my Buyer's representation services. In other words, when it comes time to writing an offer, my Buyer's offer is made contingent upon the Seller paying for my representation compensation. Most sellers expect to pay for the buyer's representation and welcome a buyer's offer with this request.
I go into this in more detail when we meet in person.
WHAT EVER YOU DO - BE CAREFUL WHAT YOU SIGN! YOU HAVE OPTIONS that you may not be being told about!
Why not just work with the listing agent?
Can't I save on the purchase price this way since the Seller will save on Buyer-Broker Compensation costs?
These are such great questions, because if I didn't know what I know, I feel like I would consider the same things.
Have you ever heard the saying, "The devil is in the details."? - well this is very true when it comes to buying AND selling real estate.
The listing agent has a fiduciary duty to the Seller to get as much for the property as possible - so how does that equate to a buyer getting the best price, concessions, and terms...?
Well, it doesn't.
A listing agent participating in "dual representation" cannot aid in creating a price or offer strategy, concession and term negotiation, and also cannot help the buyer determine repairs or offer repair negotiation approaches.
Did you know? There is a monetary incentive for the listing agent if a buyer loses their earnest money.
The listing agent is entitled to half of the buyer's earnest money if earnest money is lost or forfeited by the buyer due to breach of contract, out of timeline cancelations or incorrect notice filings combined with other factors.
And the reasons don't even stop there, other reasons include, but are not limited to:
A buyer's representative will make sure your rights are protected and the correct addendums for the property are filed.
For Example:
A property that has septic tank requires a special addendum.
A property in an HOA requires an special addendum.
A property built prior to 1978 requires a special addendum.
A property within some fly zones requires a special addendum.
A property that is for sale by a non-U.S. resident requires a special addendum. - A buyer is responsible for withholding from the seller 15% of the purchase price at the close of escrow. If a buyer does not write the offer accordingly, then a buyer can and likely would be held responsible for paying that 15% of the purchase price in addition to the home purchase.
...and so on and so forth in many other property circumstances.
I'm not joking, this is serious.... The filing of these addendums protect buyers - not sellers, so it is important to attach applicable addendums to a buyer's offer so that to provide buyers with specific protections and rights that they would not otherwise have if the addenda's are not filed with the offer.
Sometimes buyers do not understand what value a Buyer-Broker Representative brings to them, and I understand how this has come to be thought - not all Realtors® are equal - and likely buyers who do not see value in having their own representation have not had good experiences in the past or are potentially unknowing to the work taking place behind the scenes that got them to the closing table in the past. However, there is a lot of value in the protections and ease of contract paperwork and processes of an escrow that a Buyer Broker Representative gives to their buyer. It is also the buyer's responsibility to choose to work with a Realtor® that has the knowledge and experience to effectively represent and guide them and negotiate favorably for them throughout the escrow. in Real Estate School, Realtors® are not taught negotiation and are only briefed for six hours on the state contracts... they do NOT teach Realtors® about all of the practical addendums and how they apply...
Scary... I know.
A buyer's representative will evaluate market value of the property - this is important so that a buyer does not overpay for a home and also protects a buyer with a loan since a property will need to appraise for the buyer to receive funding. If a property does not or cannot appraise and the seller refuses to reduce the sale price to appraisal price, then the buyer is not only out of pocket for their inspection costs, but they are also out of pocket for their appraisal costs, and these expenses are not refundable to the buyer. A buyer's agent cannot 100% eliminate the chances of a a property not appraising, but the likeliness of going under contract for more than market value is significantly reduced.
A buyer's representative will also protect a buyer from getting into escrow on a property that will not pass their loan criteria.
This is a common and grave mistake made by many rookie and experienced agents alike. What this means for a buyer?
- Too often I see a listing state that the property is eligible for FHA, VA, or Conventional Loan, but either upon viewing photos or seeing the property in person, there are issues with the property that will hold a property from getting funded and will cost the buyer several hundred dollars for any re-inspection fees - which could still result in a failed appraisal inspection that results in the buyer not being able to obtain financing for the property. A Buyer-Broker Representative will guide clients away from making these mistakes and in turn save their buyers from wasted time, likely a little heartbreak, and about $1,000+ in inspection and appraisal costs.
A buyer representative will help guide a buyer with negotiations, price, term, concession, and repair or credit in lieu of repair strategy and negotiation.
I have additional negotiation techniques that I have developed through my decade + years of experience and through my joy of what I call "chess negotiation," but I share those approaches with my clients once we start working together and identify a property to strategize making an offer on. Every property will require a customized approach based on always different factors.
A buyer representative will guide their buyer on the type of inspections they should consider and explain why they are important so that a buyer can determine what inspections they want to order. Many times when I am on the listing side of a transaction, I recognize a buyer has failed to consider important inspections that are not covered in a general inspection of a property. A seasoned agent will know what properties should have additional specialized inspections.
A buyer representative will guide on repair negotiations and or credits in lieu of repairs. There is an art to this, buyers who yield my suggestions are far more successful in repair or credit negotiations than buyers who call all the shots on repair requests.
A buyer representative makes sure that the seller is complying with the contract timeline and delivering to the buyer the proper disclosures, repairs, credits and concessions, as well as protecting the buyer from a Seller breaches agreement, access for inspection, or even possession rights of a buyer.
The list goes on...
More Q & A to come... this page is under my construction.